DNC's Bank Debts Mount

By Thomas B. EdsallBy Thomas B. EdsallSeptember 30, 1985

The Democratic National Committee, forced to pay a controversial $600,000 debt from President Jimmy Carter's 1980 reelection campaign and struggling to build up its direct-mail donor list, has boosted its bank debts this year by $1.1 million.

Loans have financed a major exploration of public attitudes -- 43 focus groups in six cities and the first comprehensive survey since 1981 -- designed to find issues and messages to appeal to prospective donors and voters.

In addition, a large chunk of cash -- $238,000 -- went to Patrick H. Caddell's polling firm, Cambridge Survey Research. The bill represented the unpaid portion of more than $3 million that Caddell charged the DNC and the Carter campaign in 1980.

The DNC had tried to avoid responsibility for the Caddell bill, along with more than $350,000 in other leftover Carter campaign debts. But, after protracted dealings with the Federal Election Commission, the DNC was ruled liable. Privately, party officials complain that Carter has done nothing to help pay the nagging debt.

Overall, the $1.1 million in bank loans along with other debts to vendors has pushed the DNC over $2 million in the red. By the end of August, the committee owed almost $2.4 million and had $225,000 cash on hand.

Paul G. Kirk Jr., chairman of the DNC, said much of the committee's red ink should disappear after a $1,000-a-head gala on Oct. 9, the party's major fund-raising event of the year.

In the long run, Kirk argued, the investment in the focus groups and the major survey may provide tools to expand the DNC's direct-mail donor base above its current level of 500,000 persons.

Frank O'Brien, who runs the DNC's direct-mail program, said the committee now depends almost entirely on ideologically liberal donors and on elderly voters who see the Democratic Party as the protector of Social Security.

A major function of the focus groups and poll will be to determine how to expand the donor base into less ideological voters generally between the ages of 35 and 55. Findings suggest that these voters could be drawn to the Democratic Party by what O'Brien called "family economic issues," such as the costs of college education and purchasing a house. The $125,000 poll will subdivide the 5,500 respondents according to census data on income, race, education, home ownership, age and other factors. This will, according to O'Brien, help determine methods of targeting direct-mail solicitations by combining Democratic voter lists with demographic data.

The poll is being conducted by Targeting Systems Inc. of Arlington, specialists in marketing and demographic targeting. The focus groups, which have been completed, were handled by Philip Kotler, a professor of marketing at Northwestern University.

The fact that the DNC has not conducted any polls since 1981 partially reflects the cash disparity between the Democratic and Republican parties. The Republican National Committee often spends $125,000 on polling in a month.

FEC data suggest that this year the RNC raised about $6.40 for every $1 raised by the DNC. Through the first six months, the RNC had raised $22.3 million and had more cash on hand -- $4.5 million -- than the DNC had raised for the first half of the year, $3.5 million.

DNC spokesman Terry Michael said the committee's financial condition is as good or better than it has been in past years. "It's a normal situation at the DNC," he said. "I can't tell you how many millions the DNC has borrowed over the past few years."